HII Reports First Quarter 2026 Results
Rhea-AI Summary
HII (NYSE: HII) reported Q1 FY2026 results: revenue $3.1B (+13.4% YoY) and net earnings $149M (diluted EPS $3.79). Operating income was $155M (5.0% margin). New contract awards were $4.0B, bringing backlog to $54.0B. Company reaffirmed FY26 guidance, including free cash flow $500–$600M.
Positive
- Revenue +13.4% YoY to $3.1 billion in Q1 2026
- New awards $4.0B, total backlog increased to $54.0 billion
- Reaffirmed FY26 guidance including free cash flow target of $500–$600M
Negative
- Net cash used in operations of $390M and free cash flow negative $461M in Q1
- Operating margin declined to 5.0% from 5.9% (down 89 bps)
- Mission Technologies segment operating income fell 12.5% YoY to $35M
News Market Reaction – HII
On the day this news was published, HII declined 10.25%, reflecting a significant negative market reaction. Argus tracked a trough of -7.7% from its starting point during tracking. Our momentum scanner triggered 65 alerts that day, indicating high trading interest and price volatility. This price movement removed approximately $1.63B from the company's valuation, bringing the market cap to $14.31B at that time. Trading volume was elevated at 2.5x the daily average, suggesting increased selling activity.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
HII was up 0.77% pre-release, while key aerospace & defense peers like AVAV (-2.92%), KTOS (-0.86%), and ERJ (-0.54%) were down. Momentum scans showed only TXT up (~3.07%) with no news, pointing to stock-specific rather than sector-wide drivers.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 05 | FY2025 earnings | Positive | -10.6% | Full-year 2025 revenue and EPS growth with strong free cash flow delivery. |
| Oct 30 | Q3 2025 earnings | Positive | +6.9% | Record Q3 revenue, higher guidance and growing backlog supporting outlook. |
| Jul 31 | Q2 2025 earnings | Positive | +7.9% | Moderate revenue growth, record backlog and higher free cash flow guidance. |
| May 01 | Q1 2025 earnings | Negative | -1.2% | Revenue and earnings declines despite improved margins and reaffirmed guidance. |
| Feb 06 | FY2024 earnings | Negative | -18.3% | Flat revenue, sharply lower EPS and margin compression versus prior year. |
Earnings releases often trigger sizable moves, with one notable negative divergence when strong FY2025 results were met with a double-digit selloff.
Over the last year, HII has delivered multiple earnings updates showing steady revenue growth but volatile market reactions. Events on Feb 6, 2025 and Feb 5, 2026 highlighted full-year results, while quarterly reports on May 1, 2025, Jul 31, 2025, and Oct 30, 2025 focused on backlog expansion, guidance tweaks, and margin shifts. This Q1 FY26 release continues the pattern of higher revenues and robust backlog, alongside ongoing margin scrutiny and reiterated guidance.
Historical Comparison
Across the last 5 earnings-related releases, HII’s average move was -3.07%, showing that even fundamentally solid updates have often been met with cautious or negative trading responses.
Recent earnings events show revenue growth, sizable backlogs, and shifting margins, with guidance repeatedly reaffirmed or raised but market reactions swinging between strong gains and sharp selloffs.
Market Pulse Summary
The stock dropped -10.3% in the session following this news. A negative reaction despite revenue growth and reaffirmed guidance would fit past episodes where solid operational updates were met with selling, such as prior full-year results that drew a double-digit decline. Weak near-term free cash flow, margin compression and mixed segment performance have previously fueled concern. History shows earnings events can produce sharp swings, so any drawdown might have reflected heightened sensitivity to valuation, execution risk, or cash generation rather than a collapse in demand.
Key Terms
free cash flow financial
segment operating income financial
operating margin financial
non-GAAP financial
EBITDA margin financial
backlog financial
capital expenditures financial
AI-generated analysis. Not financial advice.
NEWPORT NEWS, Va., May 05, 2026 (GLOBE NEWSWIRE) -- HII (NYSE: HII) today reported results for the first quarter of fiscal 2026.
Highlights
- First quarter revenues were
$3.1 billion - First quarter net earnings were
$149 million or$3.79 diluted earnings per share - Completed builder’s sea trials for aircraft carrier John F. Kennedy (CVN 79)
- New collective bargaining agreements ratified at Ingalls Shipbuilding that extend through 2031
- Company reaffirms previously issued FY26 financial guidance1
First Quarter Results
First quarter 2026 revenues of
Operating income in the first quarter of 2026 was
Segment operating income2 in the first quarter of 2026 was
Net earnings in the first quarter of 2026 were
Net cash used in operating activities in the quarter was
New contract awards in the first quarter of 2026 were
“We made good progress on our 2026 operational initiatives in the first quarter. Shipbuilding throughput has continued to improve with meaningful year over year growth in the first quarter as our team remains focused on driving efficiency and expanding the industrial base network," said Chris Kastner, HII’s president and CEO.
¹The financial outlook, expectations and other forward looking statements provided by the company for 2026 and beyond reflect the company's judgment based on information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.
²Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Results of Operations
| Three Months Ended | |||||||||||||||
| March 31 | |||||||||||||||
| ($ in millions, except per share amounts) | 2026 | 2025 | $ Change | % Change | |||||||||||
| Sales and service revenues | $ | 3,099 | $ | 2,734 | $ | 365 | 13.4 | % | |||||||
| Operating income | 155 | 161 | (6 | ) | (3.7) | % | |||||||||
| Operating margin % | 5.0 | % | 5.9 | % | (89) bps | ||||||||||
| Segment operating income1 | 172 | 171 | 1 | 0.6 | % | ||||||||||
| Segment operating margin %1 | 5.6 | % | 6.3 | % | (70) bps | ||||||||||
| Net earnings | 149 | 149 | — | — | % | ||||||||||
| Diluted earnings per share | $ | 3.79 | $ | 3.79 | $ | — | — | % | |||||||
¹Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations.
Segment Operating Results
Ingalls Shipbuilding
| Three Months Ended | ||||||||||||||
| March 31 | ||||||||||||||
| ($ in millions) | 2026 | 2025 | $ Change | % Change | ||||||||||
| Revenues | $ | 725 | $ | 637 | $ | 88 | 13.8 | % | ||||||
| Segment operating income | 49 | 46 | 3 | 6.5 | % | |||||||||
| Segment operating margin % | 6.8 | % | 7.2 | % | (46) bps | |||||||||
Ingalls Shipbuilding revenues for the first quarter of 2026 were
Ingalls Shipbuilding segment operating income for the first quarter of 2026 was
Key Ingalls Shipbuilding milestone for the quarter:
- Completed builder’s sea trials for USS Zumwalt (DDG 1000)
- Authenticated the keel of amphibious transport dock Philadelphia (LPD 32)
- Ratified new collective bargaining agreements that extend through 2031
Newport News Shipbuilding
| Three Months Ended | ||||||||||||||
| March 31 | ||||||||||||||
| ($ in millions) | 2026 | 2025 | $ Change | % Change | ||||||||||
| Revenues | $ | 1,665 | $ | 1,396 | $ | 269 | 19.3 | % | ||||||
| Segment operating income | 88 | 85 | 3 | 3.5 | % | |||||||||
| Segment operating margin % | 5.3 | % | 6.1 | % | (80) bps | |||||||||
Newport News Shipbuilding revenues for the first quarter of 2026 were
Newport News Shipbuilding segment operating income for the first quarter of 2026 was
Key Newport News Shipbuilding milestones for the quarter:
- Completed builder’s sea trials for aircraft carrier John F. Kennedy (CVN 79)
Mission Technologies
| Three Months Ended | |||||||||||||||
| March 31 | |||||||||||||||
| ($ in millions) | 2026 | 2025 | $ Change | % Change | |||||||||||
| Revenues | $ | 748 | $ | 735 | $ | 13 | 1.8 | % | |||||||
| Segment operating income | 35 | 40 | (5 | ) | (12.5) | % | |||||||||
| Segment operating margin % | 4.7 | % | 5.4 | % | (76) bps | ||||||||||
Mission Technologies revenues for the first quarter of 2026 were
Mission Technologies segment operating income for the first quarter of 2026 was
Mission Technologies results included approximately
Mission Technologies EBITDA margin1 in the first quarter of 2026 was
Key Mission Technologies milestones for the quarter:
- Completed the expansion of our U.K. unmanned operations facility, which significantly enhances and strengthens the company’s presence in the U.K. and increases capacity and support for the U.K. Royal Navy and European partners
- Selected to compete on
$25.4 billion Advanced Technology Support Program V (ATSP5) microelectronics multi-award contract
¹Non-GAAP measures. See Exhibit B for definitions and reconciliations.
HII Financial Outlook1
- Reaffirming FY26 and medium term outlook
- Medium term2 HII revenue growth of approximately
6% - Medium term2 shipbuilding revenue growth of approximately
6% - Medium term2 Mission Technologies revenue growth of approximately
5% - FY26 shipbuilding revenue between
$9.7 and$9.9 billion ; expect shipbuilding operating margin3 between5.5% and6.5% - FY26 Mission Technologies revenue between
$3.0 and$3.2 billion , - FY26 Mission Technologies segment operating margin of approximately
5% ; and Mission Technologies EBITDA margin3 between8.4% and8.6% - FY26 free cash flow3 between
$500 and$600 million
| FY26 Outlook1 | ||
| Shipbuilding Revenue | ||
| Shipbuilding Operating Margin3 | ||
| Mission Technologies Revenue | ||
| Mission Technologies Segment Operating Margin | ~ | |
| Mission Technologies EBITDA Margin3 | ||
| Operating FAS/CAS Adjustment | ( | |
| Non-current State Income Tax Expense4 | ~( | |
| Interest Expense | ( | |
| Non-operating Retirement Benefit | ||
| Effective Tax Rate | ~ | |
| Depreciation & Amortization | ~ | |
| Capital Expenditures | ||
| Free Cash Flow3 |
¹The financial outlook, expectations, and other forward-looking statements provided by the company for 2026 and beyond reflect the company's judgment based on the information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.
²Medium term growth represents our expected compound annual growth rate over the next three to five years.
³Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and non–GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
⁴Outlook is based on current tax law. Variability exists based on how and when individual states conform to recent federal tax law changes.
About HII
HII is America’s largest shipbuilder, delivering the world’s most powerful ships and all-domain mission technologies, including unmanned systems, to U.S. and allied defense customers. HII is the largest producer of unmanned underwater vehicles for the U.S. Navy and the world.
With a more than 140-year history of advancing U.S. national security, HII builds and integrates defense capabilities extending from the core fleet to C6ISR, AI/ML, EW and synthetic training. Headquartered in Virginia, HII’s workforce is 44,000 strong. For more information, visit www.HII.com.
Conference Call Information
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company’s website: www.HII.com. A replay of the call will be available on the website for a limited time.
Cautionary Statement Regarding Forward-Looking Statements and Projections
Statements in this earnings release and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to:
- our dependence on the U.S. Government for substantially all of our business;
- significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, government shutdowns, shifts in defense spending, and changes in customer short-range and long-range plans);
- our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively;
- changes in business practices, procurement processes and government regulations, including changes through executive orders, contract terms, or other policies or practices applicable to our industry, and our ability to comply with such requirements;
- adverse economic conditions in the United States and globally;
- our level of indebtedness and ability to service our indebtedness;
- our ability to deliver our products and services at an affordable life cycle cost and compete within our markets;
- our ability to attract, retain, and train a qualified workforce;
- subcontractor and supplier performance and the availability and pricing of raw materials and components;
- our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions;
- investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business;
- changes in key estimates and assumptions regarding our pension and retiree health care costs;
- security threats, including cyber security threats, and related disruptions;
- natural and environmental disasters and political instability;
- health epidemics, pandemics and similar outbreaks; and
- other risk factors discussed herein and in our other filings with the SEC.
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.
This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures.
Exhibit A: Financial Statements
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
| Three Months Ended March 31 | ||||||||
| (in millions, except per share amounts) | 2026 | 2025 | ||||||
| Sales and service revenues | ||||||||
| Product sales | $ | 2,004 | $ | 1,713 | ||||
| Service revenues | 1,095 | 1,021 | ||||||
| Sales and service revenues | 3,099 | 2,734 | ||||||
| Cost of sales and service revenues | ||||||||
| Cost of product sales | 1,741 | 1,451 | ||||||
| Cost of service revenues | 950 | 889 | ||||||
| Income from operating investments, net | 5 | 13 | ||||||
| General and administrative expenses | 258 | 246 | ||||||
| Operating income | 155 | 161 | ||||||
| Other income (expense) | ||||||||
| Interest expense | (22 | ) | (28 | ) | ||||
| Non-operating retirement benefit | 53 | 48 | ||||||
| Other, net | 2 | 6 | ||||||
| Earnings before income taxes | 188 | 187 | ||||||
| Federal and foreign income tax expense | 39 | 38 | ||||||
| Net earnings | $ | 149 | $ | 149 | ||||
| Basic earnings per share | $ | 3.79 | $ | 3.79 | ||||
| Weighted-average common shares outstanding | 39.3 | 39.3 | ||||||
| Diluted earnings per share | $ | 3.79 | $ | 3.79 | ||||
| Weighted-average diluted shares outstanding | 39.3 | 39.3 | ||||||
| Dividends declared per share | $ | 1.38 | $ | 1.35 | ||||
| Net earnings from above | $ | 149 | $ | 149 | ||||
| Other comprehensive income | ||||||||
| Change in unamortized benefit plan costs | 2 | 1 | ||||||
| Tax expense for items of other comprehensive income | (1 | ) | — | |||||
| Other comprehensive income, net of tax | 1 | 1 | ||||||
| Comprehensive income | $ | 150 | $ | 150 | ||||
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
| ($ in millions) | March 31, 2026 | December 31, 2025 | ||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 216 | $ | 774 | ||||
| Accounts receivable, net of allowance for expected credit losses of | 406 | 339 | ||||||
| Contract assets | 1,989 | 1,758 | ||||||
| Inventoried costs | 230 | 219 | ||||||
| Income taxes receivable | 278 | 284 | ||||||
| Prepaid expenses and other current assets | 98 | 77 | ||||||
| Total current assets | 3,217 | 3,451 | ||||||
| Property, Plant, and Equipment, net of accumulated depreciation of | 3,742 | 3,726 | ||||||
| Operating lease assets | 274 | 267 | ||||||
| Goodwill | 2,650 | 2,650 | ||||||
| Other intangible assets, net of accumulated amortization of | 673 | 694 | ||||||
| Pension plan assets | 1,586 | 1,544 | ||||||
| Miscellaneous other assets | 391 | 417 | ||||||
| Total assets | $ | 12,533 | $ | 12,749 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Trade accounts payable | 692 | 556 | ||||||
| Accrued employees’ compensation | 345 | 443 | ||||||
| Current portion of postretirement plan liabilities | 119 | 119 | ||||||
| Current portion of workers’ compensation liabilities | 219 | 217 | ||||||
| Contract liabilities | 822 | 1,220 | ||||||
| Other current liabilities | 505 | 490 | ||||||
| Total current liabilities | 2,702 | 3,045 | ||||||
| Long-term debt | 2,701 | 2,700 | ||||||
| Pension plan liabilities | 155 | 155 | ||||||
| Other postretirement plan liabilities | 195 | 200 | ||||||
| Workers’ compensation liabilities | 446 | 442 | ||||||
| Long-term operating lease liabilities | 230 | 223 | ||||||
| Deferred tax liabilities | 615 | 572 | ||||||
| Other long-term liabilities | 342 | 339 | ||||||
| Total liabilities | 7,386 | 7,676 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, | 1 | 1 | ||||||
| Additional paid-in capital | 2,070 | 2,087 | ||||||
| Retained earnings | 5,577 | 5,487 | ||||||
| Treasury stock | (2,449 | ) | (2,449 | ) | ||||
| Accumulated other comprehensive loss | (52 | ) | (53 | ) | ||||
| Total stockholders’ equity | 5,147 | 5,073 | ||||||
| Total liabilities and stockholders’ equity | $ | 12,533 | $ | 12,749 | ||||
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended March 31 | |||||||
| ($ in millions) | 2026 | 2025 | |||||
| Operating Activities | |||||||
| Net earnings | $ | 149 | $ | 149 | |||
| Adjustments to reconcile net cash used in operating activities: | |||||||
| Depreciation | 55 | 54 | |||||
| Amortization of purchased intangibles | 21 | 25 | |||||
| Stock-based compensation | 21 | 24 | |||||
| Deferred income taxes | 43 | (11 | ) | ||||
| Loss (gain) on investments in marketable securities | 3 | (3 | ) | ||||
| Other non-cash transactions, net | 3 | 3 | |||||
| Change in | |||||||
| Accounts receivable | (67 | ) | (175 | ) | |||
| Contract assets | (231 | ) | (334 | ) | |||
| Inventoried costs | (11 | ) | (7 | ) | |||
| Prepaid expenses and other assets | 7 | 44 | |||||
| Accounts payable and accruals | (338 | ) | (126 | ) | |||
| Retiree benefits | (45 | ) | (38 | ) | |||
| Net cash used in operating activities | (390 | ) | (395 | ) | |||
| Investing Activities: | |||||||
| Capital expenditures | |||||||
| Capital expenditure additions | (74 | ) | (67 | ) | |||
| Grant proceeds for capital expenditures | 3 | — | |||||
| Acquisitions of businesses | — | (133 | ) | ||||
| Proceeds from disposition of assets | — | 1 | |||||
| Net cash used in investing activities | (71 | ) | (199 | ) | |||
| Financing Activities: | |||||||
| Proceeds from line of credit borrowings | 15 | — | |||||
| Repayment of line of credit borrowings | (15 | ) | — | ||||
| Dividends paid | (54 | ) | (53 | ) | |||
| Employee taxes on certain share-based payment arrangements | (43 | ) | (14 | ) | |||
| Other financing activities, net | — | (3 | ) | ||||
| Net cash used in financing activities | (97 | ) | (70 | ) | |||
| Change in cash and cash equivalents | (558 | ) | (664 | ) | |||
| Cash and cash equivalents, beginning of period | 774 | 831 | |||||
| Cash and cash equivalents, end of period | $ | 216 | $ | 167 | |||
| Supplemental Cash Flow Disclosure | |||||||
| Cash paid for interest | $ | 35 | $ | 8 | |||
| Non-Cash Investing and Financing Activities | |||||||
| Capital expenditures accrued in accounts payable | $ | 13 | $ | 16 | |||
Exhibit B: Non-GAAP Measures Definitions & Reconciliations
This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures as defined by SEC Regulation G and indicated by a footnote in the text of this release. Definitions for the non-GAAP measures, and related reconciliations, are provided below. Because not all companies use identical definitions or calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.
Segment Operating Income and Segment Operating Margin. We internally manage our operations by reference to segment operating income and segment operating margin and use these measures to evaluate our core operating performance. We believe that segment operating income and segment operating margin reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes.
Segment operating margin is defined as segment operating income as a percentage of sales and service revenues.
Shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin. We use shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin to evaluate our core operating performance. We believe these measures reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
Shipbuilding operating margin is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue. Shipbuilding revenue is the sum of revenues of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment.
Mission Technologies EBITDA is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation, and amortization.
Mission Technologies EBITDA margin is defined as Mission Technologies EBITDA as a percentage of Mission Technologies revenues.
Free cash flow. We use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. We believe free cash flow is an important measure that may be useful to investors and other users of our financial statements because it provides insight into our current and period-to-period performance and our ability to generate cash from continuing operations. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.
Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.
In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward-looking GAAP and non-GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
Reconciliations of Segment Operating Income and Segment Operating Margin
| Three Months Ended | ||||||||
| March 31 | ||||||||
| ($ in millions) | 2026 | 2025 | ||||||
| Ingalls revenues | $ | 725 | $ | 637 | ||||
| Newport News revenues | 1,665 | 1,396 | ||||||
| Mission Technologies revenues | 748 | 735 | ||||||
| Intersegment eliminations | (39 | ) | (34 | ) | ||||
| Sales and Service Revenues | 3,099 | 2,734 | ||||||
| Operating Income | 155 | 161 | ||||||
| Operating FAS/CAS Adjustment | 9 | 10 | ||||||
| Non-current state income taxes | 8 | — | ||||||
| Segment Operating Income | 172 | 171 | ||||||
| As a percentage of sales and service revenues | 5.6 | % | 6.3 | % | ||||
| Ingalls segment operating income | 49 | 46 | ||||||
| As a percentage of Ingalls revenues | 6.8 | % | 7.2 | % | ||||
| Newport News segment operating income | 88 | 85 | ||||||
| As a percentage of Newport News revenues | 5.3 | % | 6.1 | % | ||||
| Mission Technologies segment operating income | 35 | 40 | ||||||
| As a percentage of Mission Technologies revenues | 4.7 | % | 5.4 | % | ||||
Reconciliation of Free Cash Flow
| Three Months Ended | ||||||||
| March 31 | ||||||||
| ($ in millions) | 2026 | 2025 | ||||||
| Net cash used in operating activities | $ | (390 | ) | $ | (395 | ) | ||
| Less capital expenditures: | ||||||||
| Capital expenditure additions | (74 | ) | (67 | ) | ||||
| Grant proceeds for capital expenditures | 3 | — | ||||||
| Free cash flow | $ | (461 | ) | $ | (462 | ) | ||
Reconciliation of Mission Technologies EBITDA and EBITDA Margin
| Three Months Ended | ||||||||
| March 31 | ||||||||
| ($ in millions) | 2026 | 2025 | ||||||
| Mission Technologies sales and service revenues | $ | 748 | $ | 735 | ||||
| Mission Technologies segment operating income | $ | 35 | $ | 40 | ||||
| Mission Technologies depreciation expense | 3 | 3 | ||||||
| Mission Technologies amortization expense | 18 | 22 | ||||||
| Mission Technologies state tax expense | 2 | 2 | ||||||
| Mission Technologies EBITDA | $ | 58 | $ | 67 | ||||
| Mission Technologies EBITDA margin | 7.8 | % | 9.1 | % | ||||
Contacts:
Brooke Hart (Media)
brooke.hart@hii-co.com
202-264-7108
Christie Thomas (Investors)
christie.thomas@hii-co.com
757-380-2104
